Hi. I'm lookiing for a new graphics card for my computer but I have no idea what's best for my computer. I want to be able to play KOTOR and TSL with being able to have working alpha channels and shaders.
Examples:

If you want a system that will run KOTOR well, you'd be better off finding an old XP system someone is offloading for next to nothing (or better yet, for free). Any new card worth having isn't really optimised for crusty decade-old OGL console ports.

That being said, you have a few options, although "cheap" is an extremely vague term. You might want to specify a budget. I would say an nVidia 560 Ti is about as entry level as you'd want to bother with. Anything less and you may as well stick with your integrated graphics, especially given how anaemic your CPU is (that will be a bottleneck in any modern game). Looking at the Newegg site, they would appear to be around the $200 mark, slightly less for ones with a mail-in rebate. Someone else may be able to offer their 2¢ on ATI/AMD alternatives, if you go in for that sort of thing.

^ROFLCopter. OP's CPU is more than adequate for either KotOR game, as long as it's set to run on a single core.

@OP: Since ATI GPUs are notoriously glitchy with these games, I recommend an Nvidia GT 430 or better. You can find one for ~$30 after rebate if you're in the US.

Well, I don't live in the US. But I took at look at the GT 430. Reasonable prices. And I watched a video of somebody play BF3 with it. It was laggy at first but he's recording it so that would lag it a bit, and textures didn't load until like 3-5 seconds. But anyways, I'm fine with something like that. And I don't wanna start a fight on "Which option is the best option". Just something where I can still keep this computer, but get an actual graphics card for it. KOTOR and TSL run fine, but I want to play them and see everything they way it's supposed to.
But if I'm getting a new graphics card, I MAY need to get a new case.